Why Catalonian Nationalism Is a Recipe for Economic Decline

Catalonia (PanAm) – Last year, the Scottish independence referendum fell due to economic reasons. A majority of Scots rejected nationalism at the voting booth because they didn’t want to lose the pound sterling. Nor did they want to miss out on the United Kingdom’s net subsidies. Nor did they want to risk their membership in the European Union and the European market, since it became clear that an independent Scotland would have to submit itself to a long admissions process.

The same issues apply to the current debate about Catalonian independence from Spain. The economic case for rupture with Madrid, in fact, hardly strengthens the nationalist cause.

This is a rather recent development, since Catalonia used to be a net contributor. The problem, says Fernandez-Lasquetty, is that “Catalonian nationalism is very expensive.”

“The Catalonian nationalist left has duplicated the state’s structures,” he adds. For instance, they have imposed Catalan as the official administrative language, thus incrementing administrative costs in a way that, from Fernández-Lasquetty’s perspective, is totally unnecessary.

He adds that the Catalonian social security system, which, as in the rest of Spain, redistributes taxes since it’s not based on individual contributions to personal accounts, would collapse without Spanish financing. Hence, the nationalist slogan, “Spain picks our pockets,” is at odds with reality.

“The Spanish state’s direct payments allow Catalonia to maintain its schools, hospitals, and pensions,” Fernández-Lasquetty affirms. This is the case although Catalonia, as an autonomous community, enjoys the “very broad financial powers” established by the Spanish constitution. According to its terms, the region keeps at least 50 percent of its contributions in income tax and VAT. It also keeps half of what the Catalonian hydrocarbon industry pays in taxes.

Artur Mas, a Catalonian nationalist politician who heads the Generalitat or regional parliament, is aware that economics won’t win the argument for independence. However, he threatens that, should Madrid stand in the way, Catalonia could stop making its contribution of nearly 20 percent of payments on Spain’s national debt, as the Economistreports.

For Fernández-Lasquetty, however, the real problem is that “nationalism requires a very intensive use of public funds.” Catalonia’s government apparatus grows at an accelerated rate because this has been the nationalists’ tactical aim for decades. Separatist politicians, he explains, have sought to gain personally by making promises that can only be kept with greater state intervention.

This is why “it’s very difficult to reconcile nationalism with economic freedom.”

For his part, Luis Espinosa Goded, economics professor at Quito’s San Francisco University, states that “the nationalist discourse is an impoverishing one, because it doesn’t concern itself with the creation of wealth.”

“Catalonian society is making a great political effort — and it’s dragging the rest of Spanish society along — but they’re not discussing economic growth or wealth creation. The debate is not productive. Rather it’s introspective, societal navel-gazing,” he adds, “because all energies are spent on answering the question: what does it mean to be Catalonian? This means that nobody is thinking about what we have to do to have a more prosperous society.”

The debate is not only economically wasteful. It has also impoverished politics. “If the only thing being discussed is whether or not Catalonia is a country,” Espinosa Goded says, “then politics itself begins to rotate only around one axis: nationalists versus non-nationalists.”

And when nationalism is the decisive political factor, “strange alliances” arise in the Catalonian parliament. Mas, in fact, leads a separatist coalition that includes supposed liberals of his Democratic Convergence party, Christian-Democrats, and the Popular Unity Candidacy, whose members are “more communist than the Castros” according to Espinosa Goded,

This completely distorts the priorities of political debate. As a result, essential issues such as taxes, the size of the state, or public services are hardly discussed at all.

He adds that the legal uncertainty concerning Catalonia’s future has also been very expensive. “At this moment, we don’t know if Catalonia will operate under Spanish tax law in 2017. We don’t know if it will be a part of the Spanish market. And the same applies to the European Union and the European market.”

Just as in Scotland’s case, an independent Catalonia would have to start an arduous application process to enter the European Union, which is a group of nation states, not of peoples.

Espinosa Goded concludes that the crucial question is not whether or not Catalonia will be economically sound as a country. “The question is: how much has the independence process cost to this day?”

“It’s not about how many companies will leave Catalonia in the future, but about how many are leaving now or deciding not to invest in the region due to the great uncertainty that the nationalists have brought about.”

Fernández-Lasquetty adds that nationalism’s worst aspect is its ability to tear families asunder. He says that he knows many Catalonian families whose members no longer meet in order to avoid bitter disputes concerning independence.

“There are no longer any good options,” he says. “There’s too much hate and resentment. Too many individual liberties have been cast aside.”

Image Source: Fredrik Rubensson Flickr, Creative Commonsparc guell

This makes me think of the poet Horace’s famous line: dulce et decorum est pro patria mori (it’s sweet and decorous to die for one’s country). This might be the case under normal circumstances. But when the recurring question of whether or not a country exists brings about poverty, corrodes liberties, and divides families, it might be more decorous to find another cause for which to live.

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